Student landlords welcome best ROI

Landlords who are renting to students across the UK enjoy better levels of return on their investment than others in the main body of the private rented sector, a study has discovered.

According to the findings of the National Landlords Association (NLA) survey, landlord insurance customers who deal with students receive yields that average out at 6.7 per cent, which is much better than the 6.1 per cent seen as a national average.

With the number of students across the UK remaining relatively consistent, the main thing that landlords need to worry about is finding something suitable to them - often it is the case that cheap yet large flats and houses are the best options, and these bring in greater yields thanks to low initial outlay.

However, there are also a number of other factors, aside from the return on investment, that make students the best tenants, according to the NLA.

The organisation said that only 38 per cent of tenants in this demographic have had rental arrears in the past three months. This compares favourably to the 59 per cent of blue collar workers and 71 per cent of benefit tenants, proving that students are far more reliable in general.

In addition, these types of properties also consistently see better occupancy rates than other areas of the private rented sector. According to the findings, only 30 per cent of student landlords had empty homes in the last quarter compared to 40 per cent of those letting to families.

However, Carolyn Uphill, chair of the NLA, warned that while student lettings appear to be one of the best ways for people to get involved in the market, it should never be seen as an "easy win".

"As with all tenancies, it’s important to establish a good, professional relationship from the start. It is also essential that you set out fair terms in your tenancy agreement and that both landlord and tenant fully understand their obligations throughout the tenancy."